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Poor demand hits US raw material imports

Jul 18, 2019 | 11:49 AM | New York | Mei Ling Toh

Tags  ferrous scrap, raw materials, scrap imports, pig iron, DRI, US Census Bureau,

Tepid demand for finished steel and lackluster order books curbed United States' mills appetites for steelmaking raw materials in May, causing imports to contract from April levels.

May's imports of raw materials, which were booked in April, declined by 15.3% month on month to 876,570 tonnes, US Census Bureau data showed. Increased ferrous scrap and direct-reduced iron (DRI) intakes failed to offset a 39.9% reduction in pig iron bookings to 399,673 tonnes.

Average US capacity utilization rates drifted to 81.3% for the week ended Saturday May 25 from 82.3% for the week of May 4, with domestic mills struggling to fill their order books due to declining finished steel prices.

Fastmarkets' daily steel hot-rolled coil index, fob mill, fell by 9.3% to $29.33 per hundredweight on May 31 from $32.35 per cwt on May 1.

US mills imported several ferrous scrap cargoes from European suppliers, with 16,733 tonnes of No1 bundles and 16,429 tonnes of shredded scrap shipped from Sweden and 24,058 tonnes of No1 bundles received from Belgium. A Spanish supplier delivered 10,424 tonnes of No1 bundles to the US.

Canadian ferrous scrap shipments into the steelmaking regions of Detroit, Chicago and Cleveland rose by 5.8% sequentially to 178,428 tonnes in May due to increased flows of shredded scrap, which doubled to 37,241 tonnes from 17,932 tonnes in April. Imports of unspecified ferrous scrap from the country grew by 4.6% to 44,113 tonnes from 42,165 tonnes.

Domestic ferrous scrap prices experienced a second consecutive downward correction in May, pushing prime scrap prices down by $50-60 per gross ton from March levels. The consumer buying price for No1 busheling, delivered mill Alabama, was at $312 per ton ($307 per tonne) in May – a bargain compared with pig iron, which was trading at $355-360 per tonne at the time.

Meanwhile, US imports of pig iron declined by 39.9% to 399,673 tonnes, with deliveries from Russia tumbling by 79.2% to 92,456 tonnes in May from 444,780 tonnes the previous month. Offsetting this partially were gains in flows from Brazil, which more than doubled to 163,995 tonnes from 66,396 tonnes; and Ukraine, up by 5.6% to 138,772 tonnes from 131,433 tonnes).

DRI imports spiked by 82.2% to 216,639 tonnes in May as shipments from Trinidad and Tobago increased by 49.8% to 177,677 tonnes from 118,621 tonnes. Apart from this, a cargo containing 38,759 tonnes of DRI was delivered by a Russian supplier.


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